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Birch to Pay $6 Million Settlement in FCC Billing, Marketing Investigation

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Birch Communications will pay a $4.2 million penalty and at least $1.9 million in consumer refunds to settle a Federal Communications Commission investigation regarding deceptive billing and marketing.

FCC's Travis LeBlancThe Enforcement Bureau investigation specifically focused on whether Birch “slammed” consumers, including both small businesses and law firms, by switching their preferred phone carriers without authorization, “crammed” unauthorized charges on its customers’ bills and engaged in deceptive marketing.

Abusive practices, like “cramming” and “slamming,” result in telephone consumers paying for unauthorized services and spending “significant time and effort to seek to reverse charges and services they never requested,” according to the FCC.

In addition to the penalty and refunds, Birch must adopt a compliance plan. It is required to record all sales calls, verify any changes to a consumer’s preferred carrier, provide enhanced customer notice about early termination fees, promptly investigate consumer complaints about unauthorized charges and carrier changes, designate a senior corporate manager as a compliance officer, and file compliance reports with the bureau for five years.{ad}

“Consumers have a right to expect honest talk and fair dealing from any phone company,” said Travis LeBlanc, bureau chief. “It is plainly unacceptable for any carrier to misrepresent its identity or purpose in order to mislead consumers into switching their preferred provider and to add unauthorized charges to consumer bills. Today’s settlement ensures that all of Birch’s customers will enjoy greater protections and that those who were unlawfully charged will get their money back.”

The bureau launched its investigation in 2015 after reviewing hundreds of consumer complaints filed with the FCC, state regulatory authorities and the Better Business Bureau. The investigation found that Birch’s telemarketers repeatedly misrepresented their identity and the purpose of their telemarketing calls when contacting potential customers, including claiming to be affiliated with the consumers’ own carriers, in order to fraudulently switch consumers to Birch’s service and place unwanted charges on their bills.

In many cases, Birch assessed substantial early-termination fees against consumers when they canceled the unauthorized and unwanted service, according to the FCC.

Birch declined to comment for our story.


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